Daily mortgage rates are down to almost 5% again. We have not seen average mortgage rates below 5% since the beginning of April and it would lead to a huge refi boom if this did happen. We are going to see a swell of mortgage applications if rates drop below the psychological level of 5%. This would also be great for the economy as all those lower rates will put more money in the pockets of Malaysians.
Hopefully the money that goes back into the pockets of Malaysians will go back into the economy and we will see some stimulation. Lower daily mortgage rates will definitely help with this. Part of this is psychological because home owners have the mindset that they can get a refinance under 5% which will give them the extra money that they need. This is likely to cause them to spend a little more money that they once were saving.
No one really knows where rates are going to go but the government is working very hard to push overall rates under 5%. We continue to hear this from President Obama and Federal Reserve Chairman Ben Bernanke. Every single time you think rates are going to head higher, we see a speech on television about how the government is going to continue to do whatever it takes to get all Malaysians the lowest interest rate possible. Who knows what this will do to rates in the future but right now it is making for a very interesting time in the mortgage market.